Luxury Homes

Shared ownership of property is a great route to take if you want to get onto the property ladder. However, before you jump at this chance, you should look at the pros and cons of this. Understanding the pros and cons of shared ownership will ensure that you make an informed decision regarding this type of investment of your funds.

The Pros

The primary benefit of shared ownership is the fact that you will be able to get onto the property ladder as an owner-occupier. This brings long-term stability, but without the overstretching of your finances that a full purchase would create. Additionally, you will not have to provide as large a sum as you would if you were buying outright.

Shared ownership will also decrease the monthly repayments that you have to make to your mortgage. As you are not asking for a large mortgage, you will find that the monthly payment is lower than what you would pay as rent. There is also the benefit that mortgages are more accessible with shared ownership even if you are on a lower wage.

The last benefit that you should consider is the security on tenure that comes with this. This security is unlike what you have with a private rental as you can live in the property for as long as you wish. As long as all the payments are made each month, you will not have to leave until you are ready.

The Cons

While there are a number of benefits to shared ownership, there are also a number of drawbacks. The primary drawback is the fact that not all lenders will offer mortgages for shared ownership. This means that you have to look harder for a mortgage, but it is important to note that this has been changing over recent years.

Another drawback is the fact that the property you purchase will be leasehold only. There are some properties that can become a freehold, but this will need to be agreed with the housing provider. The problem is that this will increase the costs of your ownership and might make this a less attractive offer.

The last drawback that you need to consider is the restrictions that could be placed on any home improvements that you want to complete. While you are able to internally decorate the property, the housing provider may bar you from certain home improvements. You will generally have to get permission before you make any structural changes to the property.

The concept of shared ownership was first introduced in the UK in the late 1970s as an initiative to help middle and low-income persons to afford to rent and eventually acquiring homes in the competitive UK real estate industry. The government-backed initiative primarily targeted persons within the economy that have limited financial capacity and whose ability to climb the property ladder was in serious question. According to details of the initiative, the scheme allows the government to chip-in and partner with interested persons who qualified for the program by allowing them to contribute between 25% and 75% of the total value of the property while the government foots the rest of the bill.

Persons earning an annual income of between 20,000 and 90,000 were considered eligible for consideration. Priority was also given to persons living in the proximity of their houses of interest as that would minimize the logistics involved in ensuring the success of the program. To further ensure the success of the objectives of the program, the UK government ensures that persons interested in benefiting from the program were not previous property owners or attached to any other property of value within the UK as well as overseas.

In the period between the rollout of the program in the 1970s and 2014, government reports indicate that up to 58,000 persons have successfully benefited. It has, therefore, increased the ownership potential of qualified persons while giving upcoming aspiring homeowners an opportunity to equally benefit. Besides helping persons to become homeowners, the program has also laid a good framework for successful beneficiaries of the program to sell their property after the end of the program.

This process is, however, highly regulated by the housing association in the country and only allows for 100% owners the full rights of merchandising their property. The association does, however, owing to its vested interests in the program, chip-in in situations where one may choose to sell the property before 100% transfer of ownership is achieved.

With the UK government successfully pushing the program, reports indicate that it has helped to positively shape the housing industry in the country while pushing developers to build more homes to meet the rising demand. The program has, since 2004, been successfully retailing home ownership at a rate of between 6,000 and 11,000 annually.

To ensure additional benefits and flexibility, the program has been designed to accommodate various customer demands, especially in situations where individuals still in the working industry who have enrolled for the program to sublet their houses and still maintain their leaseholds with the housing association. This allows for aspiring homeowners to successfully change their location in reference to their workplaces without necessarily being inconvenienced by the law. To find shared ownership properties in your area please visit Property Booking.